We have discovered a Polycomb repressive complex, PRC2, in the fungal meningitis pathogen Cryptococcus neoformans, that silences chromatin domains via methylation of histone H3 on lysine 27 (H3K27me). This is the first Polycomb system to be identified in a human pathogen. We propose to define the core properties and components of this system and to investigate the role of H3K27me regulation in adaptation to the host. The Polycomb silencing systems of animals and plants are critical epigenetic regulators of development that, remarkably, mediate heritable memory of prior developmental and environmental events. Polycomb systems are composed of the PRC2 complex, which catalyzes H3K27me, and the PRC1 complex, which monoubiquitylates H2A and mediates chromatin compaction. Such chromatin is also designated facultative heterochromatin because it can be dynamically regulated. The genomes of a handful of other fungi have also been reported to encode predicted PRC2 components, raising the possibility that the system functions as a general epigenetic regulator in this kingdom. We purified the five-subunit PRC2-like complex of C. neoformans and showed that it mediates subtelomeric H3K27 trimethylation (H3K27me3) and gene silencing near chromosome ends. Our studies also revealed that a chromodomain subunit of the PRC2 complex directly recognizes the H3K27me3 product of the methyltransferase, thereby effectively tethering the PRC2-like complex to the sites of previous action. Our finding that the disruption of this tethering activity results in ectopic H3K27me3 deposition at H3K9me-marked sites of constitutive heterochromatin was unexpected and demonstrates the utility of the system for obtaining new insights. The powerful genetic and biochemical tools available in C. neoformans provide unique opportunities both to elucidate the fundamental properties of a Polycomb system and to investigate the biological role of H3K27me regulation in the adaptation of a pathogen to its mammalian host. To accomplish these goals we will 1) elucidate the core properties of PRC2-mediated gene regulation, 2) define the molecular components of the C. neoformans Polycomb system, and 3) investigate the role of Polycomb in the modulation of virulence. These experiments will elucidate inputs and epigenetic properties of this mechanism, the first Polycomb system to be uncovered in a human pathogen. Furthermore, the proposed work will identify new mediators of a fungal Polycomb system, illuminate its relationship with its animal and plant counterparts, and enable mechanistic investigations. Finally, these studies will elucidate the role of H3K27me regulation in pathogen adaptation to the host.